Growing concerns about losing ground toward a goal of U.S. energy
independence, environmental sustainability, and climate change have
heightened interest in harnessing renewable energy resources as a response
to there critical issues. For example, to date, 23 states and the District of
Columbia have Renewable Portfolio Standards requirements.

Electricity generated using renewable energy resources will for the most part
be delivered to the point of use via large-scale transmission and distribution
systems. Consequently, the successful integration of renewable energy
generation into large power systems if fundamental to successfully addressing
energy independence, environmental sustainability and climate change
concerns.

The integration of renewable energy generation must be considered in the
light of a range of challenges facing today's electrical system, where price and
technical performance are critical issues as well.

The needs specific to renewable electricity generation are different from those
of conventional power generators around which the existing system was
designed. These include one fact that we deal with today: that many
renewable resources are location constrained, i.e., the electric system must
reach them; they cannot reach it.

We need policies to address this need. Specifically, we need to develop
policies that support the installation of renewable energy technologies in
appropriate locations, with the objective of avoiding unnecessary costs.

These policies must be consistent with the development and implementation
of commercial frameworks that accommodate renewable energy generation
on a "level playing field" with respect to traditional generating technologies
and that encourage investment in it.

Important policy goals are met here. California has significant wind potential
at Tehachapi. California's electric system must reach it, as it cannot move
itself to reach the existing system. The California ISO policy achieves the
objectives of supporting the installation of renewable energy technologies in
an appropriate location, while avoiding unnecessary costs. The policy also
supports the implementation of a commercial framework that accommodates
renewable energy on a level playing field with traditional generating
technologies and that encourages investment in it.

It should be emphasized that today's order approves the framework of a
financing mechanism, including mechanisms that will ensure that any rolledin
rate treatment is no more than necessary to facilitate the needed
investment. Significantly, it leaves the important final details to be worked
out among the stakeholders, which will ultimately lead to a section 205 filing.

I commend the California ISO and California stakeholders for groundbreaking
work that will become a model for others in the industry who are seeking to
work creatively to better deploy location-constrained resources, and even
carbon sequestration sites.